MARKETING: Marketing drives Ford's Brazil comeback

After a decade of multimillion-dollar losses, a precipitous loss of market share, lackluster vehicles and an ill-fated venture with Volkswagen AG, Ford Motor Co.'s Brazil operation is improving.

The reversal of fortune, led by Brazilians, is driven by marketing.

"Our market share started to grow last year with the introduction of the Fiesta subcompact in May," says Richard Canny, the 41-year-old president of Ford South American Operations.

"From a low of 6 percent of the market in 2002, we ended 2002 at 9.3 percent. And in November, we had more than an 11 percent share. Much of this success was due to the vehicle's new advertising and marketing."

The Amazon Project

Before the Fiesta launch, Ford had started planning the Amazon Project, a new-vehicle program.

The project was shelved for various reasons, including capital investment availability and Brazil's slumping economic climate. But with the momentum generated by the Fiesta, the project was reopened for evaluation.

Some internal critics questioned Ford of Brazil for thinking about creating a vehicle in a declining market. But Brazilian native Rogelio Goldfarb, Ford of Brazil's director of government affairs and marketing, says, "Our research showed Brazilians wanted something new and special in their favorite form of transportation - small, well-engineered, low-priced vehicles known as populars.

"The research also showed consumers wanted features found in more expensive vehicles along with big-car performance - turbochargers and superchargers, leather, power steering and brakes, air conditioning, good sound systems and electronic toys. "It was a terrific challenge, but we set to work to see if we could meet these demanding expectations and our corporate goals."

Goldfarb immediately began a crash, three-phase program to evaluate the viability and profit potential of the Amazon Project.

Phase 1 indicated there was a market for a new vehicle with attributes that could be manufactured in Brazil profitably. The Fiesta platform would be used for the vehicle that would be smaller than the small Ford Escape SUV, and it would have 1.0-, 1.6- and 2.0-liter engine configurations. These results were approved, and manufacturing and engineering work began on the vehicle.

Phase 2 was a comprehensive marketing and advertising plan. It was not just a plan for a new vehicle because it represented a new category of vehicles in Brazil - the mini-SUV. Its name: EcoSport.

Phase 3 was the consumer launch.

The turnaround time for all three phases was six months.

Based on a sneak preview of the EcoSport last fall at Brazil's annual car show in Sao Paulo, Ford of Brazil believed it had a winning vehicle design. The challenge was to market it correctly.

The right pricing

It had to be priced significantly below the marketplace, interior features had to be impressive, and it had to represent good quality, cache and status.

Using Brazil's odd tax laws, the 1.0-liter engine version of the EcoSport with supercharger was exempt from the 30 percent manufacturing tax and would sell for about $10,500.

"This is $11,000 less than our only current competitor, Suzuki's Vitara. Neither VW, Fiat nor GM have models to compete with the EcoSport in design, function or price, which will certainly help our sales," Canny says.

Goldfarb says the vehicle "had to be Brazilian; it was an essential component of the plan." It was going to be designed, engineered, manufactured and marketed in Brazil for Brazilians by Brazilians.

Brazil has an international reputation for its national love of life, music, poetry, the outdoors and color.

"Our goal was to combine all these nationalistic elements, personalities and reputations into a communications program for the new vehicle," Goldfarb says.

TV was used as the primary medium. Commercials showed young people driving from the beaches of Rio to the boulevards of Sao Paulo to the Amazon jungle. Copy for the commercials used a poem titled Rules of Your New Life.

The Internet was a vital component of the debut.

"Over 69 percent of the consumers in Brazil use information and data gathered from the Web for buying cars and trucks," Canny says. "It is a vital communication source for our customers and dealers."

Has the campaign worked?

The EcoSport went on sale in March, and Ford Brazil sold 3,957 units its first two months. Not bad in a nation that is selling only 1.5 million vehicles a year, down from 3.1 million just a few years ago. And Ford just said it will introduce the EcoSport to Mexico on Friday, May 16.

The success in the United States of BMW's Mini Cooper is well known, and the news that Mercedes-Benz's small Smart car will be sold here in the next couple of years, generated a question to Canny: Would Ford consider bringing the EcoSport to America?